Dimdim Inc et al v. Williamson

Filing 55

ORDER GRANTING MOTIONS TO STAY PROCEEDINGS AND DENYING MOTION TO STRIKE, WITHOUT PREJUDICE. Signed by Judge Richard Seeborg on 1/22/13. (cl, COURT STAFF) (Filed on 1/22/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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For the Northern District of California

United States District Court

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DIMDIM, INC, et al.,
Plaintiffs,

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v.
RICHARD A. WILLIAMSON, ON
BEHALF OF AND AS TRUSTEE FOR AT
HOME BONDHOLDERS’ LIQUIDATING
TRUST,

No. C 12-3403 RS
ORDER GRANTING MOTIONS TO
STAY PROCEEDINGS AND
DENYING MOTION TO STRIKE,
WITHOUT PREJUDICE

Defendant.
____________________________________/

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Pursuant to Civil Local Rule 7-1(b), Plaintiffs’ motion to stay proceedings, and Defendant’s

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motion to strike are suitable for disposition without oral argument, and the hearing set for January

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24, 2013 is vacated. The motion to stay will be granted, and the motion to strike will be denied

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without prejudice to it being renewed in the event the stay is lifted and this litigation goes forward.

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This action grows out of a matter brought in the Central District of California entitled

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Richard A. Williamson, on behalf of and as Trustee for At Home Bondholders’ Liquidating Trust v.

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Citrix Online LLC et. al., Case No. 2:11-cv-02409-AHM-JEM (“the Citrix action”). Dimdim, Inc.,

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plaintiff here, was originally named as a defendant in the Citrix action. After being dismissed from

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that action on the basis of improper joinder, Dimdim brought this declaratory relief action regarding

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the same patent.

Judgment has since been entered in the Citrix action under a claims construction that may be

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case dispositive here, but which is currently on appeal. The parties are in general agreement that

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under these circumstances, this action should be stayed, pending the outcome of that appeal.

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Defendant, however, argues that his pending motion to strike should be decided prior to imposition

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of the stay.

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Defendant’s motion, while labeled solely as a motion to strike, invokes both Rule 12(b)(6)

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and Rule 12(f) of the Federal Rules of Civil Procedure. Technically, it seeks to dismiss Dimdim’s

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third claim for relief, and to strike the corresponding “affirmative defense” pleaded in Dimdim’s

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response to defendant’s counterclaims. The claim for relief and the affirmative defense both allege
the patent in suit is unenforceable due to inequitable conduct before the USPTO by the named

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For the Northern District of California

United States District Court

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inventor, Alfred Sallette, “and/or his patent prosecution counsel.” Defendant contends that the

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allegations far fall short of the applicable standards for pleading inequitable conduct, particularly in

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light of Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011).1

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Defendant argues that the sufficiency of Dimdim’s allegations should be adjudicated at this

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juncture because those allegations essentially charge non-parties Sallette and his patent prosecution

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counsel, Brian M. Hoffman, with dishonesty and illegal conduct. Defendant contends the

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“unfounded and deficient allegations unfairly drag [Sallette and Hoffman] into this matter and

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unjustifiably impugn their character.” Even assuming defendant is correct that Dimdim has not

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alleged sufficient facts to state a viable inequitable conduct claim, and even assuming that no facts

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exist that could be alleged to cure the defect, defendant’s characterization of the burden imposed by

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the mere existence of the pleading is greatly overstated. Particularly if Dimdim’s pleading is as

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devoid of facts as defendant claims, it is not reasonable to assume that any person reading it would

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conclude that Sallette and Hoffman are necessarily, or even likely, guilty of inequitable conduct.

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Additionally, while the Therasense court identified many negative consequences that can result

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from allowing weak inequitable conduct claims to be litigated, none of those concerns will arise

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Although Therasense did not involve pleading standards per se, the court decried the fact that
“allegations of inequitable conduct are routinely brought on ‘the slenderest grounds,’” and
proceeded to “tighten[] the standards for finding both intent and materiality in order to redirect a
doctrine that has been overused to the detriment of the public.” Id. at 1289-90.
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during the time this action is stayed. Finally, given that there appears to be a non-trivial possibility

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that this litigation will never go forward, it would be a poor use of judicial resources to render what

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ultimately could be no more that an advisory opinion on the sufficiency of Dimdim’s allegations.

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Accordingly, the motion to stay these proceedings is granted. The motion to strike is denied,

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without prejudice to its renewal in the event the stay is ever lifted. The parties shall file joint status

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reports every 120 days until such time as this action is dismissed or there are grounds to lift the stay.

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IT IS SO ORDERED.

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For the Northern District of California

United States District Court

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Dated: 1/22/13
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

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